How Smart Incentives Drive Financial Inclusion for Women-Led Businesses in Vietnam

The study shows that well-designed incentives, especially multi-category contests, significantly increase bank lending to women-led firms in Vietnam without harming loan quality or other business lines. It also finds that female loan officers respond even more strongly to these incentives, helping unlock an under-served market segment.

The Asian Development Bank, together with Rutgers University and the University of Sydney, launches a rare real-world investigation into one of Vietnam’s persistent financial inequities: the difficulty women-owned and women-led small and medium-sized enterprises (WSMEs) face in accessing bank credit. Despite Vietnam’s booming entrepreneurial landscape, women continue to shoulder a financing gap estimated at more than $1 billion annually. The study centers on a fundamental question: can financial incentives for loan officers shift lending behavior in ways that meaningfully expand credit access for women without compromising loan quality or profitability? It answers this through a six-month randomized controlled trial inside one of Vietnam’s major commercial banks, turning everyday lending agents into central actors in a high-stakes experiment.

Inside the Incentive Designs Tested Across 50 Branches

The trial deployed two sharply contrasting incentive mechanisms. The first was a simple piece-rate reward, offering a fixed bonus for each new WSME loan. The second was a structured multi-category contest that reset every month, awarding top performers, most improved agents, and rookies, an inclusive approach designed to mitigate the discouragement typical of winner-take-all tournaments. Branch managers also received aligned incentives to ensure organizational cohesion. These mechanisms were introduced into an environment where women-led firms, though numerous and economically vital, face higher rejection rates, smaller loan amounts, and lingering misperceptions of risk. Loan officers, as the gatekeepers of credit, became the ideal target for testing whether incentive design can correct market inefficiencies.

Contest vs. Cash: A Clear Difference in Impact

The study’s headline finding is decisive: any incentive increased WSME loan acquisition by about 40 percent, but the contest dramatically outperformed the piece-rate scheme. Contest branches saw a 58 percent surge in new loans to women entrepreneurs, especially in urban areas where business density and lending opportunities are greatest. Monthly resets, public leaderboards, and the chance for multiple types of agents, not just high performers, to win appear to have fueled steady engagement. The piece-rate incentive, though familiar and straightforward, generated more modest gains, suggesting that the open-ended, relational nature of SME lending responds more strongly to competitive, multi-layered motivation than to linear pay-per-loan rewards.

No Signs of Risky Lending or Business Trade-offs

A critical question was whether incentivizing gender-focused lending would distort other aspects of bank performance. The results show the opposite. Agents did not shrink loan sizes to maximize counts; average loan size remained stable. Delinquency rates, measured strictly at 10+ days overdue, did not increase under either treatment. Nor did agents abandon other lending activities. Instead, they expanded them. Lending to male-owned SMEs grew slightly, indicating positive spillovers as agents broadened their outreach while searching for WSME prospects. These patterns suggest that the WSME segment was significantly underserved and that the incentives activated real market expansion rather than reshuffling existing business.

When Competition Favors Women

One of the study’s most compelling insights emerges from the gender dynamics among the lending agents themselves. Contrary to long-standing experimental findings that women shy away from competitive environments, female loan officers outperformed their male counterparts, particularly in contest branches. Their responsiveness suggests that competitive motivation increases when the task aligns with perceived strengths or domain familiarity. Working with women entrepreneurs likely provided female agents with relational or informational advantages that competition helped amplify. The result is a rare piece of field evidence showing that gendered patterns of performance under competition can reverse in real-world professional settings.